Google and Apple’s next battleground: mobile wallets

For the past two years, Apple’s iPhone and Google’s Android battled for the mobile lives of digital consumers, tomorrow they will battle for their hearts and pockets as each plans ambitious near field communications (NFC) products in next-generation devices.

Yesterday, Google CEO Eric Schmidt showed off a soon-to-be-released device by an unnamed manufacturer that allows consumers to quickly pay for items by tapping the phone against a special terminal – in other words your phone will be turned in to a contactless credit or debit card.

He said NFC will be integrated into the next generation of its Android operating system, code-named “Gingerbread”.

The move will put Google in front of Apple, which in recent weeks revealed it planned to put NFC capabilities into its forthcoming iPhone 5 device.

Speaking at the Web 2.0 conference in San Francisco, Schmidt said Gingerbread will be introduced in the next few weeks.

He said Google will be leaving it up to third-party applications developers to create NFC apps and that the internet giant will not be competing with them.

M-commerce has arrived

In other words, the road is clear for NFC firms like Ireland’s Zapa Technology, individual banks or indeed card payment giants like Visa or MasterCard to come up with compelling apps that put a virtual wallet of debit and credit cards inside your phone.

"There are going to be 500 new start-ups in the mobile payment space as these platforms emerge," Schmidt said at the Web 2.0 conference.

Apple’s forthcoming iPhone 5 – due out in spring 2011 – will come with a built-in near field communications (NFC) chip that will pave the way for a myriad of potential applications, such as mobile payments on the go. Apple may also be expanding its retail expertise to new markets.

NFC is a short-range, high-frequency, wireless communications technology that enables the exchange of data between devices over some 10 centimetres (four inches) apart. The technology could enable the growth in the market for contactless credit cards and other forms of identification and transaction.

The technology is already in use in two towns in Ireland – Dundalk and Tuam – as well as across 32 Insomnia cafes around Ireland, not to mention various Londis, Munchies and Eddie Rockets outlets via former Alphyra CEO John Nagle’s firm, Zapa Technology.

What of the white iPhone 4?

NFC built into the iPhone could open the door to a whole new paradigm in mobile commerce, allowing users to carry cash and credit inside e-wallet applications.

By simply waving the device beside a terminal with NFC a user can authorise a payment. The technology could be invaluable to the new wave of contactless credit and debit cards that dispel with using PIN numbers for micro payments under US$15. All of this is important in the move towards cashless economies.

But not only payments, according to a report on Cult of Mac, Apple also intends to use the authentication potential of NFC in the iPhone 5 as a way turning any Apple Mac into your own Apple Mac with a simple wave of the device by a reader by authenticating with bookmarks, passwords, etc, or even delivering your entire iTunes music store to any Mac computer.

This brings an exciting new dimension to the age of ubiquitous computing.